A123 CEO David Vieau said the extended-range vehicle’s battery, as well as an unspecified amount of other car batteries and products, contained defective prismatic cells due to a miscalibration in an automatic welding machine at its Livonia facility.

“This is a very narrow piece of the manufacturing operation,” he told reporters on a conference call Monday morning. “It is not a widespread epidemic of proportion that would challenge the viability of the technology.”

The lithium ion battery and systems manufacturer expects the replacement of the infected products to cost about $55 million.

Five transportation customers, including Fisker – the company’s largest – could be affected by the defective cells, officials said. Vieau declined several times to identify the companies.

Besides Fisker, A123's customers include General Motors, BMW, and others. Vieau said the BMW ActiveHybrid 3 and ActiveHybrid 5 models use cylindrical cells built at A123's plant in China. A123 is expected to supply the batteries for the all-electric Chevrolet Spark, which is expected to start being produced next year.

A123’s stock (NASDAQ: AONE) continued to tumble after this morning’s announcement. It is trading at about $1.50 a share, down nearly 12 percent from its opening. The stock was $8 a share just over a year ago.

In 2010 the U.S. Department of Energy awarded A123 with a $243 million grant to increase manufacturing capacity, and Michigan wooed the company with a tax credit worth $25.2 million over 15 years and refundable battery cell production credits worth $100 million over four years.